Sales of new homes dropped dramatically in the US last month as the boost from an $8,000 tax credit for new home buyers wore off.
The Commerce Department revealed a 11.3 per cent drop in November new home sales, down to an annual rate of 355,000, well below the 438,000 sales that economists had expected.
The figures are in contrast to Tuesday’s existing home sales numbers from the National Association of Realtors, which reported a surprise 7.4 per cent jump in November sales, more than double the expected rise.
Economists anticipate a quiet December and January for the property market, before sales pick up again in Spring.
Ian Shepherdson, chief US economist at High Frequency Economics, said: “Homes are now very affordable for people in employment who need only conforming – that is, not jumbo – mortgages, and inventory is well down from its peak.”
Economists attributed the drop in new home sales mainly to the extension of the Government’s tax credit for first homebuyers, which had been due to close on November 30.
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